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Wells made two tops at the $36.50 level, a reversal pattern that became a sell signal once WFC broke down through the horizontal support line on the chart above. Investors have October 12 earnings to thank for the breakdown. While the relatively small height of the tops means that WFC's downside target is pretty nearby, it's not uncommon for short-term reversal patterns to spur on longer-term reversals. If you're looking for a buying opportunity in Wells, I'd recommend sitting tight until this stock can find its next closest support level.

Shorts still have some high-probability downside left in this WFC trade. If you decide to bet against shares, I'd suggest keeping a tight stop just above the 50-day moving average.